Federal Preemption for AI

Extracted Attributes

• Goal

  Avoid a patchwork of state and local AI laws

• Context

  Part of Donald Trump's AI Action Plan

• Purpose

  To create a unified, business-friendly national standard for AI regulation

• Advocate

  Donald Trump's administration

• Regulatory Philosophy

  Regulatory minimalism, contrasting with EU's precautionary principle and China's control-focused regime

• Proposed Legislative Mechanism

  10-year moratorium on state and local AI regulation (proposed in H.R. 1, but not enacted)

Timeline

• The U.S. Senate cut the proposed federal moratorium on state regulation of AI from the draft federal budget bill. (Source: web_search_results)

  2025-07-01

OpenAI

OpenAI, Inc. is an American artificial intelligence (AI) organization founded in December 2015 and headquartered in San Francisco, California. It aims to develop "safe and beneficial" artificial general intelligence (AGI), which it defines as "highly autonomous systems that outperform humans at most economically valuable work". As a leading organization in the ongoing AI boom, OpenAI is known for the GPT family of large language models, the DALL-E series of text-to-image models, and a text-to-video model named Sora. Its release of ChatGPT in November 2022 has been credited with catalyzing widespread interest in generative AI. The organization has a complex corporate structure. As of April 2025, it is led by the non-profit OpenAI, Inc., registered in Delaware, and has multiple for-profit subsidiaries including OpenAI Holdings, LLC and OpenAI Global, LLC. Microsoft has invested US$13 billion in OpenAI, and is entitled to 49% of OpenAI Global, LLC's profits, capped at an estimated 10x their investment. Microsoft also provides computing resources to OpenAI through its cloud platform, Microsoft Azure. In 2023 and 2024, OpenAI faced multiple lawsuits for alleged copyright infringement against authors and media companies whose work was used to train some of OpenAI's products. In November 2023, OpenAI's board removed Sam Altman as CEO, citing a lack of confidence in him, but reinstated him five days later following a reconstruction of the board. Throughout 2024, roughly half of then-employed AI safety researchers left OpenAI, citing the company's prominent role in an industry-wide problem.

Web Search Results

• Federal Preemption in Artificial Intelligence: Assessing the Ten-Year ...

  to be trusted abroad . \ Federal vs State on the World Stage: It’s worth noting that the concept of federal preemption of state AI rules has no direct parallel globally because most countries have unitary legal systems (no equivalent of U.S. states making separate AI laws) . The closest analogies are maybe EU member states: the EU AI Act, once in force, will preempt member-state AI laws to ensure uniformity across Europe . In that sense, what the U.S. is attempting domestically (one rule vs 50) [...] The U.S. House of Representatives recently advanced H.R. 1 — officially titled the “One Big Beautiful Bill Act” — a sweeping package that narrowly passed on a 215–214 vote , . Tucked inside is a 10-year moratorium on state and local AI regulation, a provision preventing any U.S. state or city from enforcing laws “regulating artificial intelligence models, artificial intelligence systems, or automated decision systems” for the next decade , , . Supporters argue this federal preemption will avoid [...] The U.S. federal freeze on AI regulation is a bold experiment in regulatory minimalism that contrasts sharply with the EU’s precautionary principle and China’s control-focused regime . This divergence means U.S. enterprises must be bilingual in compliance — fluent in both the language of self-governed innovation at home and the language of regulatory compliance abroad . It also means the global AI community will be watching whose approach yields better outcomes: Will the U.S. see a boom in AI

• The Federal AI Moratorium is DOA; What's Next for State AI ...

  The Risk of Federal Preemption. The looming prospect of federal preemption could also explain the shift away from attempts at comprehensive AI regulation: it would be understandable if state legislators were reluctant to sink political capital into laws that they believed could have been nullified overnight. Targeted, Domain Specific Rules Fill the Gap [...] Key Takeaways: On July 1, 2025, the U.S. Senate cut the proposed federal moratorium on state regulation of AI from the draft federal budget bill. With federal preemption of AI regulation appearing unlikely, it is a good time to take stock of U.S. state-level AI regulation. [...] With federal preemption of AI regulation appearing unlikely, having been removed by a vote of U.S. senators in the negotiation over the federal budget bill, it is a good time to take stock of U.S. state-level AI regulation.

• From Data Centers to Ideology: Decoding the Latest AI Executive ...

  Given the pronouncements of the E.O.s preceding the AI Action Plan and the concurrent publication of the trio of AI executive actions impacting society and the environment, it can be argued that the administration’s national AI policy calls for a comprehensive federal preemption of state regulatory actions by the _de facto_ establishment of a federal standard of AI governance, without congressional mandate.

• Trump Administration Releases AI Action Plan and Three Executive ...

  One issue many employment practitioners have been closely tracking is the potential for federal action that would limit the growing patchwork of state and local AI laws. Earlier this year, the “One Big Beautiful Bill Act” (H.R. 1) originally included provisions for a 10-year moratorium on state and local AI regulation, but those provisions were ultimately not included in the version of the bill signed by President Trump. Still, the concept of federal preemption over AI remains a live issue. [...] The key takeaway is that while a national standard favoring “deregulation” appears to remain a priority for President Trump and his administration, the directives in the AI Action Plan do not specifically call for federal preemption of state AI laws and regulations. The practical impact of the directives in the AI Action Plan will depend heavily on how aggressively federal agencies, especially the FCC, implement the Plan’s directives, and whether the Administration pursues additional efforts to [...] The Door Remains Open to Federal Preemption of State AI Laws

• Congress Shouldn't Stop States from Regulating AI

  At first glance, the budget bill’s AI provision seems to fall neatly under express preemption — the principle that federal law overrides state regulation. But the AI moratorium is an atypical overreach. Congress has previously overridden state regulation in areas such as broadcast media, aviation, copyright, product labeling, and medical device safety. In each case, it created new federal rules to govern those areas, replacing the state regulations it was preempting. Here, however, Congress has [...] Read broadly, the provision would grant wide-reaching protection to big tech companies, AI developers and providers, and individuals who misuse AI technology. If this provision were to go into effect, developers would remain largely untouched by any effective federal oversight. That is no accident — the provision expressly allows the enforcement of state laws that make it easier to facilitate the deployment or operation of AI, and it is part of a larger effort by the Trump administration and